Eight years ago debt counsellor Fanie Grové started looking at vehicle loan statements from his clients and was staggered by what he saw: in every one of more than 80 cases he examined where the borrower had fallen into arrears, he says the bank was unlawfully overcharging interest.

In a case due to come before the Eastern Cape High Court this month, Standard Bank is accused of double charging the arrears amount owed by a mortgage client, resulting in a guest lodge being repossessed and sold at auction for a fraction of its market value.

Eight years ago debt counsellor Fanie Grové started looking at vehicle loan statements from his clients and was staggered by what he saw: in every one of more than 80 cases he examined where the borrower had fallen into arrears, he says the bank was unlawfully overcharging interest. In some cases, the overcharge was 40-50% more than the interest allowable in terms of the National Credit Act (NCA).

Banks seeking judgment against borrowers should use the magistrates’ courts, the Pretoria High Court has ruled. By bringing trifling matters before the high courts, banks are clogging up the justice system.

The Pretoria High Court struck another blow on behalf of distressed debtors last week. A full bench of three judges ruled that magistrate’s courts should be the first port of call for financial institutions seeking judgment against their clients, where matters fall within the lower courts’ monetary jurisdiction. This makes it cheaper for people to defend matters against the banks.

Last week’s Joburg court case forcing judges to impose reserve prices on all auction sales resulting from bank repossession has several important ramifications, not least of which it paves the way for a class action suit against the banks for decades of stealing people's home equity in violation of the Constitution.

A full bench of the Johannesburg High Court sat last week to deliberate on how and when reserve prices should be applied before repossessed homes are sold at sheriffs’ auctions. The three judges berated the banks for arriving in court without proper paperwork and expecting to be given judgments against clients.

Court papers filed in the South Gauteng by two of the major mortgage banks – Standard and Absa – provide a fascinating insight into the health of SA’s property sector. There are about 8 million properties in SA, of which 82% are residential. This amounts to 6,5 million residential properties, of which 33,5% are bonded. The bonded properties were worth R2,6 trillion in 2017, amounting to 52,4% of the total value of all residential properties in SA, and 56,5% of GDP.

Ordinary bank clients are seldom legally successful against the giant banks to which they entrust their money, even when the banks make terrible mistakes. That’s why the Namibian case of Faida Trading has intrigued legal writer Carmel Rickard. In her A Matter of Justice column on the Legalbrief site, she wonders what caused Nedbank to resort to what looks to her like bullying tactics rather than owning up to an awful and unexplained error by their staff. In the end the judge slammed the bank for being ‘unreasonable’, ‘obdurate’ and ‘brazingly negligent’ – but the customer was put through the wringer in getting there.

Court papers filed in the Western Cape High Court last week by University of Stellenbosch’s Law Clinic and Summit Financial Partners make for disturbing reading. They are asking the court to stop creditors from loading unlawful costs onto the accounts of distressed debtors, which they reckon has cost debtors R1 billion in unlawful fees.

One of the most popular methods by which South Africans purchase immovable property is through a loan from a bank. This process involves a mortgage bond being registered over the immovable property as security by the bank to ensure that if a person fails to pay back the loan, the bank can rely on this as security in order to claim any outstanding money owed to them.

Absa launched its new logo and image this week as part of its separation from Barclays. Visitors to Absa’s head office in Joburg were greeted by a gathering of aggrieved customers, led by the Lungelo Lethu Human Rights Foundation (LLHRF), protesting the bank’s abusive home repossession practices. A memorandum was handed over to a senior representative of the bank’s legal department, with an undertaking to commence a dialogue with LLHRF to iron out grievances.

A Royal Commission of Inquiry into banking misconduct in Australia has heard heart-rending testimony of brutal banking practices, including cases where pensioners in their 80s were forced to sell their homes to repay loans. Now a massive class action suit is in the bake over reckless lending, focusing on those who took out mortgage loans since 2012. This is one of several class action suits now being launched against the banks.

A 72 year old man gets a 30 year loan which he cannot repay, so he is forced to sell his house. Bank staff are there to flog you stuff you don't want or need. They hate their jobs, but are given stiff sales target to meet so the bosses can get year-end bonuses that run into the millions. When you default, the bank comes after everything you have. Staff are prevented from talking bad about their employers because of "disparagement clauses" in their employment contracts. Even years after they have left the bank. When, customers are asking, will bank executives get time in jail, in this expose in the wake of the Australian Commission of Inquiry into Banking. You could just as easily cut and paste this story for SA.

The EFF has shown itself a force for progressive change in SA, recently tabling a bill which would allow for the creation of a state-owned bank. In this article on Daily Maverick, deputy head of the EFF, Floyd Shivambu, explains how the existing Big 4 banks - Absa, Standard, Nedbank and FNB - continue their predatory practices against South Africans. This article shows a deep understanding of the extent to which banks are retarding the economic development of the country.

The place is Australia, but the pattern is the same we have seen in other parts of the world, with banks gouging their customers with merry abandon. It has all the elements of a crudely crafted, if effective, tale: banks and other financial services, founded, proud of their standing in society; financial service providers, with such pride, effectively charging the earth for providing elementary services; then, such entities, with self-assumed omnipotence, cheating, extorting and plundering their client.

The Standard Bank v Nkwana case recently decided in the Pretoria High Court seemed to be a major step back for home owners facing repossession and eviction. The case was argued on behalf of Nkwana by Lawyers for Human Rights, and will almost certainly be appealed - especially the court's ruling that it was okay for banks to continue selling repossessed properties for a fraction of their market value. This absurd judgment prompted a response from former public protector Thuli Madonsela: "With due respect to the court, I consider this judgement to be grossly unjust and inequitable. It is as a setback regarding social justice. Should this matter be taken on appeal, it would be great if all those concerned about social justice join in as amicus curae."

The Lungelo Lethu Human Rights Foundation has sent a petition to President Ramaphosa detailing rampant abuses by the banks. It has asked the President to make it far more difficult to evict defaulting home owners by forcing the courts to sell repossessed properties at market price and allowing financially distressed customers at least six months to get back on their feet before recommencing bond repayments - as is common in many other countries. It also wants the President to order an investigation into the criminal liability of banking executives and directors for knowingly selling properties for less than their value after the Constitution was introduced in 1994.

An Alberton couple recently defeated an attempt by Standard Bank to repossess their home after they demonstrated that they had settled the arrears the bank was claiming. Thousands of other South Africans in a similar position should pay attention. It could save their houses.

VBS, a small mutual bank with R2bn in assets, shot to prominence in 2017 when it awarded then President Zuma a R7,8m home loan. It has now been placed under curatorship by the Reserve Bank following a run by municipal depositors, who have been warned that they are violating the law by placing money on deposit with VBS, as it does not have a full banking licence.

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